The One Strategy I’m Leaning on During Geopolitical Unrest
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Geopolitics are driving the market right now.
Yesterday, on an intra-day basis, the Dow plunged more than 1,100 points during the session.
And while it’s never good to see war in the headlines, it’s my duty as a trader to provide you the best possible strategies to make volatility work in your favor.
My mentality for trading the current market is simple.
I watch how the market reacts – then I trade.
I avoid the panic.
Then I look for the best strategy to take advantage of the current volatility.
And there’s one strategy that I go back to again and again in markets like this – one that maximizes gains when volatility runs hot.
Overnight plays.
In all my years of trading, overnight trades have been the best way to get exposure to both sides of a volatile market like we have now.
One of my top overnight watchlist plays right now is Abercrombie & Fitch Co (ANF).
ANF is scheduled to report earnings this morning before the market opens. So it has an individual catalyst to capture volatility in addition to the volatility in the overall indexes.
But I’m not looking to guess which direction ANF will go ahead of earnings.
How My Overnight Trades Work
Overnight strangles are a trading strategy I use if I think the underlying security will experience a large price movement in the near future… but I’m unsure of the direction.
Let’s look at ANF.
I think a strong earnings report could shoot ANF’s stocks price up $10..
But a weak earnings report could push ANF’s stock price down $10.
I’m not sure which direction Abercrombie & Fitch will move…
But either way, I have a feeling that ANF could make a big move.
In cases like this, a strangle is the perfect play – because this options strategy would be profitable whether ANF gaps up or gaps down.
As long as ANF makes a sharp move, the strangle wins.
Action Plan: With the markets taking a hit from war worries, I believe my overnight trading strategy is the best way to capture gains in the markets right now.
ANF is one stock I’m looking to trade ahead of its earnings.
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